Question: Project NPV and sensitivity analysis. a). If a discount rate of 12% p.a. is applicable, what is the NPV of the project? What if the
Project NPV and sensitivity analysis.
a). If a discount rate of 12% p.a. is applicable, what is the NPV of the project? What if the discount rate for the project was 14%? 16%? Provide the NPVs for each scenario (no need to include spreed sheets for each).
b). Select other parameter(s) for which you wish to change the assumptions. Then check - report to CFO - how the project NPV changes depending on new assumptions you have made for that parameter. While it is up to you which one to choose and play with (no correct answer), you are required to provide parameters values used, the NPVs, and brief discussion.
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